FCA’s Targeted Support Proposal Sparks Debate
The UK’s Financial Conduct Authority (FCA) has established new rules for its targeted support initiative, generating discussion about the boundaries between financial advice and guidance. This scheme aims to provide specific consumer groups with tailored suggestions about financial products. It particularly targets millions of British citizens who are under-prepared for retirement and long-term savings planning.
Addressing Widespread Retirement Preparedness Gap
According to FCA data, approximately 12.5 million people in the UK require retirement support. Thirty-eight percent of the working-age population is saving insufficiently for their future needs. Concerningly, 59% of adults completely avoided financial advice during the past year, while only 9% received formal regulated advice. These statistics highlight the critical need for improved financial guidance accessibility.
Implementation Framework and Participant Eligibility
The targeted support scheme will be available to pension providers, wealth managers, building societies, and consultancy firms. Participating organizations can pre-define scenarios where consumers might need guidance while offering prepared suggestions for specific circumstances. The FCA conducted its consultation process between June 30 and August 29, 2025, and has now advanced to the policy development stage. The regulator aims to implement the initiative through partnerships with investment and pension companies.
Industry Response and Regulatory Concerns
Industry responses have highlighted both opportunities and challenges within the proposed framework. PIMFA, a trade association for wealth and financial advisors, urged the FCA to clearly distinguish between targeted support and regulated financial advice. The organization emphasized that suggestions should be presented as options rather than instructions. PIMFA also cautioned against crossing into regulated advice territory without proper qualifications and raised concerns about customer segmentation, terminology regarding “better outcomes,” and the inclusion of high-risk products in the scheme.
Accessibility Challenges and Regulatory Modernization
The Investing and Saving Alliance (TISA welcomed the reform but warned that consumers might remain excluded without updates to Privacy and Electronic Communications Regulations (PECR). The organization argued that without PECR modernization, approximately three-quarters of consumers could remain beyond reach. TISA recommended an opt-out model for consumer outreach and stronger rules to ensure firms provide consistent, pre-defined support without venturing into regulated advice territory.
Balancing Innovation with Consumer Protection
Both industry groups recognize targeted support as a positive step toward addressing the advice gap. However, they insist on refinements to ensure proper accessibility, clarity, and consumer protection. The initiative could potentially help millions access better financial guidance if implemented effectively. This would empower consumers to make more informed decisions regarding savings, investments, and retirement planning while maintaining appropriate regulatory safeguards.
Future Implications and Development Timeline
The FCA’s targeted support framework represents a significant evolution in how financial guidance is delivered to UK consumers. As the policy development phase progresses, stakeholders will continue providing input on implementation details. The successful launch of this initiative could establish new standards for financial guidance delivery across international markets while addressing the critical challenge of retirement preparedness in aging populations.
